By Mark R. Madler
Federal lawmakers face a Sept. 30 deadline on whether the nation’s air traffic control system will continue to be funded through taxes paid by commercial and private aircraft or instead to impose a new user fee that has the general aviation community up in arms.
Last month, the Senate Commerce Committee approved a bill creating a $25 user fee paid by both airlines and private jet aircraft alike to replace the current system of fuel, ticket and departure taxes that goes into the Airport and Airway Trust Fund. The bill now moves to the Senate Finance Committee before being voted on by the full Senate.
On the House side, the Transportation and Infrastructure Committee was expected to release its version of the reauthorization bill the week of June 18. The Ways and Means Committee needs to give it approval before going to the full House for a vote.
In the aviation industry, the lines are clearly drawn on which side prefers which funding method.
The commercial air carriers argue the user fee is more equitable and is necessary to keep its passengers from subsidizing the flights of corporate executives.
Operators of charter companies want to maintain the status quo of the fuel tax funding the air traffic control system. A user fee sets a bad precedent and adds a new level to the Federal Aviation Administration bureaucracy in order to collect it, operators said.
“It’s a way to disproportionately slide the burden onto general aviation,” said Jon Winthrop, chairman and CEO of The Air Group, an aircraft management and charter firm based at Van Nuys Airport. “No matter how many business jets we build as an industry, the airlines are still the heaviest user of the system.”
The general aviation crowd is using the National Business Aviation Association to get their viewpoint across to the lawmakers. The Alliance for Aviation Across America boasts more than 3,000 members made up of businesses, individuals, and organizations not all related to aviation but who all oppose the user fee.
The Air Transport Association of America represents the interests of commercial aviation.
None of the organizations can say for sure at this time which way Congress will go. The current legislation funding the FAA expires on Sept. 30, the end of the government’s fiscal year.
With the war in Iraq, immigration and health care, Congress already has a lot on its plate and with an antiquated system controlling the nation’s airspace, a resolution cannot come soon enough to the major air carriers.
“There’s a very real possibility this runs to the end of the year,” said ATA spokesman David Castelveter. “A lot of people think Congress won’t allow it to roll over into the election year.”
The user fee is controversial, said NBAA President Ed Bolen, yet not a partisan one.
“We are trying to get them to understand that this creates a new bureaucracy to collect the fee and a new burden that does not now exist,” Bolen said. “That resonates on both sides of the aisle.”
In the bill approved by the Senate Commerce Committee, the FAA administrator has the power to set the frequency of paying the $25, the deadline for payments, and the maximum amount of surcharges.
At its website, the FAA said that administering the user fee can be done at a minimal cost for the users and will be efficient because fewer than 500 users would account for 95 percent of billable flights.
Operators of piston planes would not pay the fee.
But Mark Sullivan, president of Skytrails Aviation at Van Nuys Airport, countered that Europe provides an example of what happens with a user fee system.
European flight students come to the U.S. to take lessons because of the cost user fees have imposed in those countries, Sullivan said.
“If the government wants this type of additional bureaucratic system, then they should look at countries like France and see why they have no or little general aviation,” Sullivan said.
If the user fee proposal goes through, corporate aviation veteran Clay Lacy predicts a chilling effect on the industry.
The charter companies may be reluctant to use their jets very often and would raise rates to make up for the additional cost, said Lacy, who is credited with bringing corporate jets to Van Nuys Airport.
If the cost gets too prohibitive, passengers who previously had flown privately may decide to take commercial flights, Lacy said.
Even though they can afford it, people who fly corporate airlines are not doing it just to burn up money.
“They weigh what their cost is against what they get,” Lacy said. “I’d hate to see the cost go up too much.”
Source: SAN FERNANDO VALLEY BUSINESS JOURNAL